Energy

Republicans Divided On West Virginia Gov’s Plan To Subsidize Appalachian Coal

Western state Republicans have already come out against West Virginia Gov. Jim Justice’s proposal to the Trump administration to subsidize burning Appalachian coal.

“When the federal government starts picking energy winners and losers, American taxpayers lose,” Wyoming Republican Sen. John Barrasso said in an emailed statement.

Justice says the Trump administration has the authority to set up a $4.5 billion program to subsidize utilities for every ton of Appalachian coal they burn, which would be welcome news for states like West Virginia.

Appalachian congressmen have largely been silent on Justice’s plan, but the newly-minted Republican governor told reporters that President Donald Trump was “really interested” in the idea. Justice recently switched his party affiliation to Republican from Democrat.

However, subsidizing Appalachian coal may eat into the market share of western coal-producing states that have gained a competitive edge in recent years. Wyoming, for example, is the country’s largest coal producer thanks to the rich, easily accessible Powder River Basin.

“Such a policy would be flat wrong, unjust, bad economic policy, and would be adopting the worse tactics of the Obama era when the government wasted billions of taxpayer dollars attempting to pick winners and losers and undermine the market,” Republican Rep. Liz Cheney said in a statement.

“Selecting certain companies or regions to be more competitive at the expense of others, doesn’t make sense,” Barrasso said. “The best way to encourage growth of Wyoming and Appalachian coal is to continue streamlining regulations, expanding exports, and developing new solutions to common challenges.”

Appalachian Republicans haven’t come out to endorse Justice’s plan, likely wanting to avoid another wedge issue amid debates over health care and tax reform.

More than 60 percent of coal comes from western states, mostly from Wyoming, according to federal data. Western coal is cheaper to extract and contains less sulfur, making it more attractive for utilities in the face of having to install expensive pollution control devices.

Justice wants Trump to give utilities $15 for every ton of Appalachian coal they use, but even with the subsidy it may still not make sense for power companies.

There’s also the question of whether or not Congress would need to appropriate funds to subsidize coal. Justice’s office says they believe Trump could fund coal on his own, but didn’t give any specifics.

“Governor Justice believes it can be done by executive order,” Justice’s spokesman Butch Antolini told Axios.

Antolini did not respond to The Daily Caller News Foundation’s request for comment.

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